Pub Date : 2009-06-01DOI: 10.25071/1874-6322.23365
L. Beccaría, R. Maurizio
Argentina constitutes an interesting case to be analyzed because during the 1990s, it achieved high rates of growth jointly with significant increases in unemployment and poverty. This document studies the dynamics of Argentine poverty between 1991 and 2003, analyzing the impact of different events that are associated with entries and exits into poverty. The effect of inflation is also identified. Data of the Argentine household survey is employed, and the methodology includes a correction for attrition. Episodes related to the labor market proved to be the most important, as they were more frequent and had an important impact on incomes. Demographic events were scarcely relevant.
{"title":"Factors associated to poverty mobility in Greater Buenos Aries","authors":"L. Beccaría, R. Maurizio","doi":"10.25071/1874-6322.23365","DOIUrl":"https://doi.org/10.25071/1874-6322.23365","url":null,"abstract":"Argentina constitutes an interesting case to be analyzed because during the 1990s, it achieved high rates of growth jointly with significant increases in unemployment and poverty. This document studies the dynamics of Argentine poverty between 1991 and 2003, analyzing the impact of different events that are associated with entries and exits into poverty. The effect of inflation is also identified. Data of the Argentine household survey is employed, and the methodology includes a correction for attrition. Episodes related to the labor market proved to be the most important, as they were more frequent and had an important impact on incomes. Demographic events were scarcely relevant.","PeriodicalId":142300,"journal":{"name":"Journal of Income Distribution®","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126129339","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2009-06-01DOI: 10.25071/1874-6322.23364
B. Omonona, F. Okunmadewa
The dearth of studies on quantitative determinants of poverty in Nigeria is a major weak point in the country’s poverty reduction policy and strategy formulation. A recent study in Kogi State of Nigeria revealed that poverty is higher among households that have male heads, are polygamous, have farming as the only occupation, have no formal education, and have no access to extension services and improved farming inputs. Poverty rises with the increase in household size and dependency ratio. On the other hand, poverty is inversely related to the extent of output commercialization, farm size, and credit. The study indicates that in Kogi State, Nigeria there is the need to reduce birth rate, provide training and education, and improve farming inputs, credit to deserving households, and marketing infrastructures, as major elements of an effective poverty reduction strategy.
{"title":"Determinants of Poverty Among Farming Households in Kogi State of Nigeria","authors":"B. Omonona, F. Okunmadewa","doi":"10.25071/1874-6322.23364","DOIUrl":"https://doi.org/10.25071/1874-6322.23364","url":null,"abstract":"The dearth of studies on quantitative determinants of poverty in Nigeria is a major weak point in the country’s poverty reduction policy and strategy formulation. A recent study in Kogi State of Nigeria revealed that poverty is higher among households that have male heads, are polygamous, have farming as the only occupation, have no formal education, and have no access to extension services and improved farming inputs. Poverty rises with the increase in household size and dependency ratio. On the other hand, poverty is inversely related to the extent of output commercialization, farm size, and credit. The study indicates that in Kogi State, Nigeria there is the need to reduce birth rate, provide training and education, and improve farming inputs, credit to deserving households, and marketing infrastructures, as major elements of an effective poverty reduction strategy.","PeriodicalId":142300,"journal":{"name":"Journal of Income Distribution®","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122478681","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2009-06-01DOI: 10.25071/1874-6322.23371
G. M. Borzadaran, Zahra Behdani
Over the last 100 years, a large number of distributions has been proposed for the modeling of size phenomena, notably the size distribution of personal incomes. The most widely known of these models are the Pareto, log-normal, generalized log-normal, generalized Gamma, generalized Beta of the first and of the second kind, the Dagum, and the Singh-Madala distributions. They are discussed as a group in this note, as general forms of income distributions. Several well-known models are derived from them as sub-families with interesting applications in economics. The behaviour of their entropy is what is here under study. Maximum entropy formalism chooses certain forms of entropy and derives an exponential family of distributions under certain constraints. Finding constraints that income distributions have maximum entropy is another direction of this note. In economics and social statistics, the size distribution of income is the basis of concentration on the Lorenz curve. The difference between the tail of the Lorenz function and the Lorenz function itself determines the entropy of mixing. In the final section of this note, theoretical properties of well-known income distributions are also derived in view of the entropy of mixing.
{"title":"Maximum Entropy and the Entropy of Mixing for Income Distributions","authors":"G. M. Borzadaran, Zahra Behdani","doi":"10.25071/1874-6322.23371","DOIUrl":"https://doi.org/10.25071/1874-6322.23371","url":null,"abstract":"Over the last 100 years, a large number of distributions has been proposed for the modeling of size phenomena, notably the size distribution of personal incomes. The most widely known of these models are the Pareto, log-normal, generalized log-normal, generalized Gamma, generalized Beta of the first and of the second kind, the Dagum, and the Singh-Madala distributions. They are discussed as a group in this note, as general forms of income distributions. Several well-known models are derived from them as sub-families with interesting applications in economics. The behaviour of their entropy is what is here under study. Maximum entropy formalism chooses certain forms of entropy and derives an exponential family of distributions under certain constraints. Finding constraints that income distributions have maximum entropy is another direction of this note. In economics and social statistics, the size distribution of income is the basis of concentration on the Lorenz curve. The difference between the tail of the Lorenz function and the Lorenz function itself determines the entropy of mixing. In the final section of this note, theoretical properties of well-known income distributions are also derived in view of the entropy of mixing.","PeriodicalId":142300,"journal":{"name":"Journal of Income Distribution®","volume":"3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128178561","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Poverty and inequality are often estimated from grouped data as complete household surveys are neither always available to researchers nor easy to analyze. In this study we assess the performance of functional forms proposed by Kakwani (1980a) and Villasenor and Arnold(1989) to estimate the Lorenz curve from grouped data. The methods are implemented using the computational tools POVCAL and Sim-SIP, developed and distributed by the World Bank. To identify biases associated with these methods, we use unit data from several household surveys and theoretical distributions. We find that poverty and inequality are better estimated when the true distribution is unimodal than multimodal. For unimodal distributions, biases associated with poverty measures are rarely larger than one percentage point. For data from multi-peaked or heavily skewed distributions, the biases are likely to be higher and of unknown sign.
{"title":"The Estimation of Poverty and Inequality through Parametric Estimation of Lorenz Curves: An Evaluation","authors":"Camelia Minoiu, S. Reddy","doi":"10.7916/D81R6XC9","DOIUrl":"https://doi.org/10.7916/D81R6XC9","url":null,"abstract":"Poverty and inequality are often estimated from grouped data as complete household surveys are neither always available to researchers nor easy to analyze. In this study we assess the performance of functional forms proposed by Kakwani (1980a) and Villasenor and Arnold(1989) to estimate the Lorenz curve from grouped data. The methods are implemented using the computational tools POVCAL and Sim-SIP, developed and distributed by the World Bank. To identify biases associated with these methods, we use unit data from several household surveys and theoretical distributions. We find that poverty and inequality are better estimated when the true distribution is unimodal than multimodal. For unimodal distributions, biases associated with poverty measures are rarely larger than one percentage point. For data from multi-peaked or heavily skewed distributions, the biases are likely to be higher and of unknown sign.","PeriodicalId":142300,"journal":{"name":"Journal of Income Distribution®","volume":"14 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133389972","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2009-06-01DOI: 10.25071/1874-6322.23368
M. Beenstock
Inequality is transmitted intergenerationally because the outcomes of parents and their children are correlated. The correlation may be due to inherited, economic, and/or contextual factors. A structural model is proposed in which parents affect their children directly through their own schooling and earnings and indirectly through their own inherited ability. By taking account of inherited ability, the causal effect on outcome of parental schooling and earnings upon the schooling and earnings of their children is identified. A generated regressor methodology is used to estimate the ability to learn and earn of Israeli parents. It is shown that the schooling and earnings of children are affected by these generated regressors. Further, although the causal effects are small, it is shown that parents’ income and schooling matter for their children’s schooling and earnings. Both nature and nurture are reflected in the intergenerational correlation for schooling and earnings, but nature and contextual variables turn out to matter more than nurture.
{"title":"The Intergenerational Transmission of Inequality for Education and Earnings","authors":"M. Beenstock","doi":"10.25071/1874-6322.23368","DOIUrl":"https://doi.org/10.25071/1874-6322.23368","url":null,"abstract":"Inequality is transmitted intergenerationally because the outcomes of parents and their children are correlated. The correlation may be due to inherited, economic, and/or contextual factors. A structural model is proposed in which parents affect their children directly through their own schooling and earnings and indirectly through their own inherited ability. By taking account of inherited ability, the causal effect on outcome of parental schooling and earnings upon the schooling and earnings of their children is identified. A generated regressor methodology is used to estimate the ability to learn and earn of Israeli parents. It is shown that the schooling and earnings of children are affected by these generated regressors. Further, although the causal effects are small, it is shown that parents’ income and schooling matter for their children’s schooling and earnings. Both nature and nurture are reflected in the intergenerational correlation for schooling and earnings, but nature and contextual variables turn out to matter more than nurture.","PeriodicalId":142300,"journal":{"name":"Journal of Income Distribution®","volume":"82 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126858008","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2009-06-01DOI: 10.25071/1874-6322.23369
Edmund Khashadourian
This article analyzes the impact of risk on decisions made by the poor within the context of the Individual Development Account (IDA) program. IDA is a matched savings program designed to help low-income households invest in appreciating assets. For these households, the risk involved with participation in IDA relates to the sacrifice they make by reducing current consumption - sometimes in a significant way - in order to be able to save. The program does not offer a match on savings per se; rather, it offers the match only when savings are invested in certain assets. Since there is no guarantee that IDA savings will be converted into assets qualified for the IDA match at the time of enrollment, participation in the program is characterized as an inherently risky decision, which is governed by different sets of behavioral factors, including the risk-taking preferences of low-income households. Consideration of risk provides an alternative explanation for issues related to program take-up, inactivity, and attrition rates. It also offers new and simple ideas on how to improve results. In addressing these problems, the article recommends using an IDA model that includes a flexible match component, to insure against the risk of unmatched savings and complement the existing IDA match structure. Simple modifications to current policy will maintain the total cost of IDA match at the existing levels. Introduction of a flexible match may mitigate the risk of decision to participate in IDA for the most vulnerable group of participants. It can also potentially reduce the percentage of inactive accounts while improving the overall retention rates in the program. Moreover, the recommended changes would not alter the nature of the IDA program, as the flexible match would only amount to a fraction of the total asset investment match.
{"title":"Decision Risks and Individual Development Accounts: An Alternative View","authors":"Edmund Khashadourian","doi":"10.25071/1874-6322.23369","DOIUrl":"https://doi.org/10.25071/1874-6322.23369","url":null,"abstract":"This article analyzes the impact of risk on decisions made by the poor within the context of the Individual Development Account (IDA) program. IDA is a matched savings program designed to help low-income households invest in appreciating assets. For these households, the risk involved with participation in IDA relates to the sacrifice they make by reducing current consumption - sometimes in a significant way - in order to be able to save. The program does not offer a match on savings per se; rather, it offers the match only when savings are invested in certain assets. Since there is no guarantee that IDA savings will be converted into assets qualified for the IDA match at the time of enrollment, participation in the program is characterized as an inherently risky decision, which is governed by different sets of behavioral factors, including the risk-taking preferences of low-income households. Consideration of risk provides an alternative explanation for issues related to program take-up, inactivity, and attrition rates. It also offers new and simple ideas on how to improve results. In addressing these problems, the article recommends using an IDA model that includes a flexible match component, to insure against the risk of unmatched savings and complement the existing IDA match structure. Simple modifications to current policy will maintain the total cost of IDA match at the existing levels. Introduction of a flexible match may mitigate the risk of decision to participate in IDA for the most vulnerable group of participants. It can also potentially reduce the percentage of inactive accounts while improving the overall retention rates in the program. Moreover, the recommended changes would not alter the nature of the IDA program, as the flexible match would only amount to a fraction of the total asset investment match.","PeriodicalId":142300,"journal":{"name":"Journal of Income Distribution®","volume":"27 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125735003","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2009-06-01DOI: 10.25071/1874-6322.23367
W. Pfau
An understanding of the financial and distributional consequences of Social Security reform requires knowledge about the actual life circumstances of participants, including the level and pattern of their lifetime earnings and their age at retirement. Some analyses of Social Security reform make simplifying assumptions about these characteristics by using ‘hypothetical workers’ with set career paths. We seek to develop greater understanding about actual lifetime earnings patterns to compare with hypothetical workers and find discrepancies which lead typical hypothetical workers to produce a more favorable impression for defined-contribution pension reforms. We suggest modifications to make a more suitable hypothetical worker.
{"title":"How Representative are Representative Workers? An Assessment of the Hypothetical Workers Commonly Used in Social Security Studies","authors":"W. Pfau","doi":"10.25071/1874-6322.23367","DOIUrl":"https://doi.org/10.25071/1874-6322.23367","url":null,"abstract":"An understanding of the financial and distributional consequences of Social Security reform requires knowledge about the actual life circumstances of participants, including the level and pattern of their lifetime earnings and their age at retirement. Some analyses of Social Security reform make simplifying assumptions about these characteristics by using ‘hypothetical workers’ with set career paths. We seek to develop greater understanding about actual lifetime earnings patterns to compare with hypothetical workers and find discrepancies which lead typical hypothetical workers to produce a more favorable impression for defined-contribution pension reforms. We suggest modifications to make a more suitable hypothetical worker.","PeriodicalId":142300,"journal":{"name":"Journal of Income Distribution®","volume":"44 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129549616","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2009-06-01DOI: 10.25071/1874-6322.23363
Matthew T. Gregg
Can economic theory help explain the persistence of a cultural enclave among the Cherokee Indians living in North Carolina during the nineteenth century? To date, Fogelson and Kutsche (1961) and Finger (1984) have identified the continuation of a communal, labor-sharing, agricultural institution called the gadugi as an example of Cherokee agency during a period of substantial upheaval. I contribute to the historiography on ancestral labor traditions by adopting Kimball’s (1988) framework on the function of farming cooperatives to test whether this arrangement sprung up as a form of insurance against the idiosyncratic risk inherent in southern agriculture. Data collected from the 1850-1880 manuscript census returns on North Carolina Cherokee farms are used to compute the variance of household self-sufficiency, which appears substantial enough to warrant a non-market mechanism to pool risk.
{"title":"Cultural Persistence as Behavior Towards Risk: Evidence from the North Carolina Cherokees, 1850-1880","authors":"Matthew T. Gregg","doi":"10.25071/1874-6322.23363","DOIUrl":"https://doi.org/10.25071/1874-6322.23363","url":null,"abstract":"Can economic theory help explain the persistence of a cultural enclave among the Cherokee Indians living in North Carolina during the nineteenth century? To date, Fogelson and Kutsche (1961) and Finger (1984) have identified the continuation of a communal, labor-sharing, agricultural institution called the gadugi as an example of Cherokee agency during a period of substantial upheaval. I contribute to the historiography on ancestral labor traditions by adopting Kimball’s (1988) framework on the function of farming cooperatives to test whether this arrangement sprung up as a form of insurance against the idiosyncratic risk inherent in southern agriculture. Data collected from the 1850-1880 manuscript census returns on North Carolina Cherokee farms are used to compute the variance of household self-sufficiency, which appears substantial enough to warrant a non-market mechanism to pool risk.","PeriodicalId":142300,"journal":{"name":"Journal of Income Distribution®","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128844046","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2009-04-15DOI: 10.25071/1874-6322.22711
S. Myers
{"title":"Just Generosity: A New Vision for Overcoming Poverty in \u0000America, by Ronald J. Sider","authors":"S. Myers","doi":"10.25071/1874-6322.22711","DOIUrl":"https://doi.org/10.25071/1874-6322.22711","url":null,"abstract":"","PeriodicalId":142300,"journal":{"name":"Journal of Income Distribution®","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-04-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132614615","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2009-04-15DOI: 10.25071/1874-6322.22705
G. Grenier, A. Tavakoli
This article compares Canada and the United States in terms of the evolution of the relative wages of production and non-production workers in the manufacturing sector. The results show that the wage ratio is affected by similar economic globalisation variables in each country. Other than technological changes, however, the overall effect of globalisation is more pronounced in Canada. Among economic globalisation variables, such as technological changes and imports from developing countries, the latter has had a less harmful effect on low-skilled workers in the United States than those in Canada. Among the other variables, the wage gap is more affected by union density in Canada. The impact of immigration is low in both countries.
{"title":"Globalisation and Wage Inequality: A Comparison of the Manufacturing Sector in Canada and the United States from \u00001970 to 2001","authors":"G. Grenier, A. Tavakoli","doi":"10.25071/1874-6322.22705","DOIUrl":"https://doi.org/10.25071/1874-6322.22705","url":null,"abstract":"This article compares Canada and the United States in terms of\u0000the evolution of the relative wages of production and non-production\u0000workers in the manufacturing sector. The results show that the wage\u0000ratio is affected by similar economic globalisation variables in each\u0000country. Other than technological changes, however, the overall effect\u0000of globalisation is more pronounced in Canada. Among economic\u0000globalisation variables, such as technological changes and imports\u0000from developing countries, the latter has had a less harmful effect\u0000on low-skilled workers in the United States than those in Canada.\u0000Among the other variables, the wage gap is more affected by union\u0000density in Canada. The impact of immigration is low in both countries.","PeriodicalId":142300,"journal":{"name":"Journal of Income Distribution®","volume":"47 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-04-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117262158","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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